“Buffer fund optimises risk sharing and mitigates downside risk” Many countries are reforming their pension systems to facilitate economic and demographic changes. New systems seek to mitigate risks by allocating surpluses to a buffer fund that smooths fluctuations in investment returns and between pension generations. This paper explores optimal risk sharing and assesses the welfare effects of the current Dutch pension proposal against theoretical…

How do people make financial decisions? How can we gain insight into what’s going on inside their heads? And what can we do with that knowledge? These questions are central to a new study being carried out by Thomas Post of Maastricht University. “Our research showed that, roughly speaking, people take one of two approaches to estimating the value of an annuity (such as…

As of February 1, 2021, Bastiaan Starink is Endowed Professor of Labor Market, Pensions and Taxation at Tilburg Law School. The remit of his chair concerns the reform of the collective second pillar of the pension system and the evolving labor market in the Netherlands. After many years of social debate and seeking consensus it appears likely that starting in 2022 the Dutch pension…

“Strengthening international cooperation had great added value”   Hazel Bateman has been associated with Netspar as a researcher for ten years. For the past five years, she contributed to the assessment of research proposals as a member of Netspar’s Scientific Council. This year, she was appointed chair: “The scientific council plays an important role in ensuring the academic quality and relevance of the research…

Transition of the Dutch Pension system requires good preparation From 1 January 2021, Nyenrode Business University and the Netspar research network will work together on a master class for directors and supervisors in the pension industry. The 2019 principle agreement for the reform of the Dutch pension system is causing radical changes. This has consequences for employers, employees, administrators and policymakers. The pension sector…

Netspar congratulates the winners of the Netspar thesis awards 2019: Wouter Otten (UT), Rory McGee (University College London) en het team van Renate Bredenoort (BeFrank) en Wendela Landstra (DNB). The prizes of € 3.000 each were awarded during the annual International Pension Workshop to outstanding master, phd and Tias theses within the Netspar research program. Wouter Otten won the prize for the best Master’s thesis for his research into the…

“Non-constant risk aversion in investment reduces uncertainty about pension capital” A disadvantage of defined contribution schemes, like those in the new Dutch pension deal, is the considerable uncertainty about pension capital at retirement. This is caused by the investment strategies used, which maximise the return with a constant relative risk aversion. This study explored the impact of using a non-constant relative risk aversion, which…

Academics have a relatively good view on how individuals should invest over the life cycle. On the investment choices of pension funds however, very little is known. Kristy Jansen (Tilburg University) delved into the world of investment strategies, liabilities and risk preferences of pension funds for her PhD research. “Practice turned out to be more unruly than theory. With the help of data, we…

“Progressive pension contributions may mitigate transition effects, but also adversely affect pension benefits and labor participation of older workers” Most Dutch pension schemes currently require all participants to pay the same contribution percentage and ensure everyone has the same accrual percentage. Younger adults, however, have a much longer investment horizon. This means that each euro a younger adult invests will generally yield more pension…

The number of self-employed workers in the Netherlands and Europe is growing. To what extent are they able to prepare well for their retirement? What about their financial well-being in later life? The doctoral research of Elisabeth Beusch (Tilburg University) provides a better understanding of the heterogeneity among the self-employed and provides insight into the implications of self-employment for different groups over the life…